ANOTHER CLANGER from the government in protecting its rich banker and celebrity cronies from a media storm occurred the other night as government minister David Gauke told a national TV audience that paying tradesmen with cash in hand was morally wrong.
It is morally wrong as it is tax evasion, so he was right, but putting it into the context of the tax avoided by the super rich through the use of tax havens and tax shelters it pales into insignificance. Unfortunately for the proletariat, many of these super rich that are hoarding over £13trillion in tax havens are cronies of the government or are the government, and the tax avoidance vehicles they use are facilitated by the very large financial companies and banks that have a credit noose around everyone’s neck.
Gauke reckons the ‘tax gap’ – tax owed but unpaid – is £35bn in the UK. If this were properly met, it would settle a large part of the interest payments on the country’s borrowing.
The smug-looking MP, though, is a hypocrite, because his previous life was that of a lawyer working for Macfarlanes, a firm that specialises in, oh, tax avoidance or ‘tax efficiency’. Furthermore, his wife works at Lexis Nexis as a lawyer who advises companies on tax matters, i.e. how to avoid paying any. Both Gaukes should be, as Jeremy Clarkson might say, paraded out in front of their families and shot. Or maybe Call me Dave will axe him. Either way it would be a good result.
We have seen lately scumbag Jimmy Carr caught paying just a couple of percent of tax on his income using a scheme which saw his company transferred to a shell company in the Channel Islands and non-repayable loans in lieu of salary paid out to Mr Carr. Most of Take That were allegedly using similar schemes according to an investigation by the Times newspaper. A Take That spokesperson said they pay “significant tax”, but would that amount to the 45% they are supposed to pay?
Premier League footballers are at it, too. In many cases their ‘image rights’ payments – amounting to around 20 percent of salary – are made into offshore trusts and they receive non-repayable directors loans in lieu of payment, thereby avoiding tax. Many players that don’t have a global image are still being paid a proportion of salary into an offshore fund as image rights, and HMRC argued unsuccessfully in the case of Portsmouth FC that this was tax evasion as the money should have been paid as salary and subject to income tax. So if Wayne Rooney was up to this – and I am not saying he is – Manchester United could be paying well upwards of £50,000 per week into an offshore image rights company, thereby not paying 45% of it as part of Rooney’s income tax. If this tax were collected, it would fund over 50 nurses. In other slightly more honourable cases players take the cash from their offshore company and pay corporation tax on it rather than income tax, which obviously is the lower amount when talking about Premier League footballer salaries.
The London Olympics acts as a giant tax haven, with a temporary exemption from UK income tax and corporation tax gifted to mega-money sponsors said to be worth up to £600million. This prompted a campaign from pressure group 38 Degrees and has resulted in a few of the companies claiming that they will not take up this tax avoidance scheme.
Sir Philip Green is one of the biggest tax avoiders, and ironically he’s been employed by Call me Dave to advise the government on austerity measures. Green himself lives in London and is not a ‘non-dom’, but his wife is a tax exile in Monaco. Green’s company Arcadia is owned by another – Taveta Investments Ltd – registered at a skeleton office in Jersey that has two shareholders named CI Law Trustees and CI Law Nominees. Dividends paid to these shareholders end up in Green’s wife’s bank account, with no tax paid.
Vodafone had an unpaid tax bill amounting to billions of pounds, but through a £1.2billion deal that was done with HMRC they are alleged to have avoided up to £6billion.
Looking elsewhere, drinks manufacturer Diageo pays only a tiny amount of UK tax because its brands were transferred to a Dutch branch and then incorporated as a new ‘subsidiary company’ that attracted tax relief to the value of the business brought into the Netherlands. As with Vodafone, a secret deal with HMRC was done and was supposedly so generous the company executives cracked open the champagne afterwards.
What should we expect from business when the business secretary, Vince Cable, is a fucking tax dodger himself?
But he’s not the only one.
According to the Citizens’ Advice Bureau, benefits in kind are ‘benefits which employees or directors receive from their employment but which are not included in their salary cheque or wages’. Therefore you could say that British MPs are avoiding tax because much of their daily expenditure is funded through expenses, upon which there is no personal tax liability for the MP. Expenses are a benefit in kind, which for everyone else attract taxation when given by their employers.
We have also seen ‘over 50‘ MPs avoiding capital gains tax by flipping their second homes. The worst case of this is that of Sir John Butterfill, who bought a £56,000 flat in his constituency of Bournemouth and nominated it as his main home and named his £1.2million six-bedroom Surrey mansion with swimming pool and extensive grounds as his second home. He then claimed loads of expenses on his mansion including £1,778 per month in mortgage interest and £17,000 on his servants quarters, then flipped it to become his main home and sold it at a profit of £600,000, upon which 40% capital gains tax would have been due had it remained as his second home. This one transaction alone is worth tens of thousands of cash in hand payments. I wonder whether David Gauke thinks all the MPs that have been up to this are morally wrong.
Tax avoidance isn’t just a big issue here: in the US Presidential campaign, we saw candidates fighting for a chance to stand against President Obama having a public spat over how much tax each of them pay, with eventual winner Mitt Romney releasing two years’ worth of tax returns. However there are still calls for the release of 10 years of returns after suspicions that Romney, who is worth $250m, has been paying no tax at all for some of them. Romney has said he pays all the tax he owes “and not a dime more”, but of course if he’s holding his wealth in tax havens, he’s not going to owe any. What’s more, Romney’s business interests include companies in Panama and the Cayman Islands that facilitate foreign investment in the USA but without any tax implications, as both are tax havens. So really, the next President of the USA could be a facilitator of tax avoidance in his own country.
So, it seems like everyone apart from the general nine-to-five public are involved in some way with tax avoidance schemes. Bring on the riots.
Indeed Phil as an adjunct, cover of gazette says that Blackpool will never be a las vegas style town, so thats it, what now? more diss hostels? get my article mate?
What with Simon BLACKburn and Neil JACK running the place?
And yes I did!
lol Blackjack, like it,this was on the cover although no mention of what next, except more council offices,lol
have you check your facts regarding butterfill? It sounds like you just want to sound sensationalist to drive traffic to your blog
http://www.telegraph.co.uk/news/newstopics/mps-expenses/5396199/MPs-expenses-Tory-MP-Sir-John-Butterfill-paid-no-tax-on-600000-house-profit.html
Read this
http://en.wikipedia.org/wiki/John_Butterfill
Tory scum, simple as.
Not sure what your point is Suspicious, that Wikipedia sources the same article I linked.
If you’re moaning because I didn’t add on that he had argued that due to his £500k renovations he ‘only’ profited to the tune of £100k and eventually did pay CGT on that, and that he paid back all the expenses once he was exposed, then fine, there it is.
But would he have done that if he had not been caught by the Telegraph? I guess we will never know.
He admitted claiming expenses for his servants quarters on national TV: http://www.guardian.co.uk/politics/2009/may/28/john-butterfill-mps-expenses
my point is that you arent fully representing the facts – and its only for one reason, to make your blog sound better – when did everyone start believing everything the newspapers write?
The type of expenses scandals from MPs are hardly the ones to focus on, check Greek politicians for instance, it makes our politicains look like angels.
Anyway, I feel I’m in a hotbet of socialist nutters here.
As Maggie said, the problem with socialism is that you eventually run out of other people’s money
When did everyone start believing what was on Wikipedia?
The ‘fact’ of the matter here, suspicious, is that Butterfill only paid CGT and repaid the expenses once he had been caught out, same as all the other MPs. He is therefore a fucking scumbag like all the others.
If you think for one second I am a socialist you are way off the mark. Next you’ll be saying that the Telegraph is a Labour paper.
Maybe you’re right, maybe the Greek politicians are significantly more corrupt. This being true, why then is George Osborne signing more and more of our cash over to them to keep their socialist gravy train rolling?
I think all these loose cannons reflects poorly on Cameron,there are far to many Tory MPs who are quite happy to spout off in the press to make a name for themselves,this suggests to me they have no respect for their leader. I agree with Phil on this one there are to many MPs lining their own pockets even the PM had a £375,000 mortgage with the interest paid on it and this isnt only a Tory problem its endemic with most of those working in the House of Commons. In these hard times the Government and HMRC should be chasing every penny but fairly not selectively. Strangely enough the people who do pay their taxes are the ones this Government are making redundant yes the public sector. By the way I am a contractor who insists on being paid by cheque so I have a papertrail for all my accounts. We have a great system which sadly can and is exploited by far to many people
I don’t think you can begrudge the mortgage interest payments on a second home, because the expenses system allows it (although I despise the expenses system). However when you have MPs that already live in and around London buying a dump in their constituency then nominating their London mansion as their second home in order to claim expenses on it, then that is criminal in my view. It’s no different to Gordon Marsden buying a cheap flat in Blackpool, claiming its his main home and then claiming tons of expenses on his Brighton palace, but he isn’t doing it.
Your comments on the public sector I don’t agree with. Every public sector staff runs at a net loss to the treasury unless their role is in some way generating wealth. We’ve had the discussion before on whether they would be cheaper to run on benefits.
However if all these arseholes were paying the proper tax, perhaps there would be much less in the way of austerity. MPs claim about £15m a year in expenses between them, which is enough for over 500 police officers. But which is more important, maintaining a lucrative gravy train or police?
I was getting ready to rip into a certain MP who I thought kept his second home in a South Coast resort but credit where credit is due his second home claims have been quite modest..
http://parliament.telegraph.co.uk/mpsexpenses/second-home/Gordon-Marsden/mp-10415
Mr David Gauke represents a constituency just outside London in Rickmansworth (just the other side of Uxbridge) which I assume is where he keeps his main residence. Yet he maintains and claims for a second home in Westminster.
Marsden it seems is quite happy to commute from his second home in Brighton.
Rickmansworth even has a station on the London Underground.
http://www.tfl.gov.uk/gettingaround/stations/1000193.aspx
Now who is fiddling the exchequer?
“Coun Blackburn told The Gazette: “While I agree decisions taken about gambling venues are best taken locally, I do not feel seeking to resurrect the super-casino plans would be helpful.
“Council officers and members are working on an economic framework which encourages diversity within the local economy – a blend of private endeavours, council, NHS and civil service jobs, tourism and hospitality and the wider retail and service sector.
“We must acknowledge the pursuit of a mono-industry has repeatedly failed Blackpool.
Totally agree TAT Tourism being a mono industry,but simon has asked Council officers to develop an economic framework,thats Donellon and co, the same twats who have wrecked the town,its like asking a hardened arsonist to build a new house after burning it down, these twat officers dont know how to regenerate the town, SACK THEM.Yet again the tail(s) wagging the dog!
bit unfair to call Cable a “tax dodger” when he has employed accountants to ensure he pays the correct amount of tax. It was the accountants mistake which they rectified immediately and Cable apologised. Hardly tax dodging is it?
Jimmy Carr could have said exactly the same thing, that his accountants were employed to ensure he paid the correct amount of tax, which in his case wasn’t much. What Carr did was totally legal, yet politicians were queueing up to slaughter him.
Plus, I don’t buy that the business secretary or his accountants didn’t know that his services were VATable and didn’t know what the threshold for VAT registration was.
Back in the good old days, MPs could claim up to £250 per day without submitting expenses.
A polish builder charging £249 per day cash in hand to build a large structure in the garden a flipped house, they’d never have thought of doing that, it would be morally wrong wouldn’t it?
Lets cut to the chase here Members of Parliament are as corrupt as anyone who thinks they can trouser a few quid without anyone noticing.
This twerp is a moment in history. This will soon be forgotten as I hope will Mr Gauke is come the next election..
As I ponder on whether or not to renew my BBC private fund raiser, I reflect on a recent Stephen Nolan programme ( 5 Live Fri/Sat/Sun 2200hrs) where he admitted to being part of a scheme that diverted tax liability away from his employer. He didn’t actually word the debate that way, but that was the gist of the programme. The dilemma arises, should I assist the BBC in tax evasion by forking out a large percentage of my pension (legally obtained) or say “go to hell” and have Marstons bailiffs extract dubious fees for illegal purposes?
Is there not a wise head on which I could seek advise; the Clanger Bros with nefarious insurance schemes, Lady and Lord Scaffold with their Clearglass estates, Leftie Donkey Lover of the RSPCD with his partnerships of Graft, Cllr Kiddie Snapper with his bogus RM Major Hero VC partner, or the Lieber Cllr who lives off Squires gate Lane who represent an Outer Mongolian constituency whilst Young Genghis (of the same educational ilk) misrepresenting her constituents…?????? Shit, the list is seemingly endless with such notable luminaries.
Forgive me. I am just about to take my godchild into Cesspool and have been to the armoury to withdraw an equaliser just in case a former council worker jumps out with a camera…
Tory Bumboys, Sandal-Nazi LibDems, Bolshevik Zanulab they’re all the same so why are we debating the differing shades of shite?
Is it wrong to tax working people almost to breaking point and then give it to a people who are able to work but refuse to do so?